RALEIGH, N.C.--(BUSINESS WIRE)--Feb 17, 2011 - Inspire
Pharmaceuticals, Inc. (NASDAQ: ISPH) announced today a strategic
corporate restructuring designed to result in the Company focusing
activities on its eye care business, allowing it to fully leverage
existing commercial capabilities, pipeline assets and related
corporate development and licensing opportunities.

Adrian Adams, President and CEO of Inspire, stated, “We
conducted a strategic evaluation of our operations following the
recent announcement of the disappointing results with our cystic
fibrosis (CF) program and believe the prudent strategy for Inspire
is to leverage our eye care business and discontinue our pulmonary
therapeutic focus. Therefore, we are implementing a substantial
corporate restructuring that we anticipate will enable us to drive
toward profitability and positive cash flow by significantly
reducing our cost base and cash burn. Our eye care business
continues to generate an attractive revenue stream from growth in
our anchor product, AZASITE® (azithromycin
ophthalmic solution) 1% for bacterial conjunctivitis, and royalties
from other ophthalmic products.”

“Our assessment of the full data set from the TIGER-2
Phase 3 trial of denufosol tetrasodium for the treatment of CF, the
open-label DEFY trial data and our current corporate resources
supports our decision to discontinue Inspire's development of
denufosol. We want to express our sincere gratitude to the CF
community including the many patients, families and care providers
who supported denufosol research through their participation in our
clinical trials. We also want to recognize and thank the employees
affected by the corporate restructuring for their many
contributions to the Company,” Adams concluded.

The corporate restructuring includes a workforce reduction of
approximately 65 positions, or 27% of total headcount, which
represents 45% of non-sales force headcount, primarily affecting
functions in Research & Development (R&D), Manufacturing
& Technical Operations and General & Administrative. There
are minimal changes to the commercial infrastructure and no
reductions to Inspire's specialty eye care sales force. This
strategic restructuring is estimated to result in a more than $40
million reduction in 2011 non-cost of sales operating expenses,
excluding restructuring charges, as compared to 2010. This amount
is estimated to include approximately $10 million of compensation
expense savings and up to $30 million in reduced R&D spending.
The Company expects to record a restructuring charge of $10-$13
million in the first quarter of 2011, which will include severance
costs, termination of ongoing denufosol contracts and activities
and the write-off of impaired assets and idle facility charges.

As mentioned in Inspire's financial results release issued
today, Inspire will host a conference call and live webcast to
discuss its fourth quarter and full year 2010 financial results,
2011 financial guidance and corporate restructuring on Thursday,
February 17, 2011 at 8:00 a.m. ET. To access the conference call,
U.S. participants may call (877) 648-7970 and international
participants may call (706) 902-0415. The conference ID number is
43734225. A live webcast and replay of the call will be available
on Inspire's website at
www.inspirepharm.com. A telephone replay of the conference call
will be available until February 24, 2011. To access this replay,
U.S. participants may call (800) 642-1687 and international
participants may call (706) 645-9291. The conference ID number is
43734225.

About Inspire

Inspire is a specialty pharmaceutical company focused on
developing and commercializing ophthalmic products. Inspire's
strategy is to create a sustainable portfolio of products by
leveraging its commercial capabilities and pipeline assets and
pursuing corporate development and licensing opportunities.
Inspire's specialty eye care sales force generates revenue from the
promotion of AZASITE® (azithromycin ophthalmic
solution) 1% for bacterial conjunctivitis and the co-promotion of
ELESTAT® (epinastine HCl ophthalmic solution) 0.05%
for allergic conjunctivitis. Inspire receives royalties based on
net sales of RESTASIS® (cyclosporine ophthalmic
emulsion) 0.05% for dry eye and expects to begin receiving
royalties in 2011 based on net sales of DIQUAS™ Ophthalmic
Solution 3% (diquafosol tetrasodium) for dry eye. For more
information, visit
www.inspirepharm.com.

Forward-Looking Statements

The forward-looking statements in this news release relating to
management's expectations and beliefs are based on preliminary
information and management assumptions. Specifically, no assurances
can be made with respect to: Inspire's ability
to focus its activities on its eye care business
and fully leverage its existing commercial capabilities,
pipeline assets and related corporate development and licensing
opportunities; the prudence of leveraging Inspire's eye care
business and discontinuing its pulmonary therapeutic focus; that
implementation of the corporate restructuring will enable
Inspire to drive towards profitability and positive cash flow,
or to significantly reduce its cost base or cash burn; that
Inspire's eye care business will continue to generate an attractive
revenue stream from growth in AZASITE and royalties from other
ophthalmic products; that the corporate restructuring will result
in a more than $40 million reduction in 2011 non-cost of sales
operating expenses, excluding restructuring charges, as compared to
2010; that the reduction in 2011 operating expenses from
the corporate restructuring will include $10 million of
compensation expense savings and $30 million in reduced R&D
spending; that Inspire will record a restructuring charge of
$10-$13 million in the first quarter of 2011, which will include
severance costs, termination of ongoing denufosol contracts and
activities and the write-off of impaired assets and idle facility
charges; and Inspire's ability to create a sustainable portfolio of
products by leveraging its commercial capabilities and pipeline
assets and pursuing corporate development and licensing
opportunities. Such forward-looking statements are subject to a
wide range of risks and uncertainties that could cause results to
differ in material respects, including those relating to product
development, revenue, expense and earnings expectations, the
introduction of a generic form of epinastine, intellectual property
rights, competitive products, results and timing of clinical
trials, success of marketing efforts, the need for additional
research and testing, delays in manufacturing, funding, and the
timing and content of decisions made by regulatory authorities,
including the U.S. Food and Drug Administration. Further
information regarding factors that could affect Inspire's results
is included in Inspire's filings with the SEC. Inspire undertakes
no obligation to publicly release the results of any revisions to
these forward-looking statements that may be made to reflect events
or circumstances after the date hereof.